Spain Embarks on New Era of Transparency with Central Register of Beneficial Owners
The Spanish government has taken a significant step forward in its commitment to combating money laundering and terrorist financing by implementing the Central Register of Beneficial Owners (CRBO). This comprehensive database will provide a crucial tool in the fight against financial crimes, aiming to prevent the misuse of financial systems.
Background
The CRBO was created in response to European Union regulations, specifically Directive (EU) 2015/849. This directive requires member states to establish a central electronic register of beneficial owners. The Spanish government has risen to this challenge by creating a unique and accessible platform that will facilitate the identification of beneficial owners.
Key Features
- Entities Obliged: Entities obliged to verify or provide information include:
- Spanish legal entities
- Entities without legal personality with their effective centre of management or principal business activity in Spain
- Entities intending to develop business relations or acquire real estate in Spain
- Register Management: The register will be managed by the Ministry of Justice, with headquarters in the Directorate-General for Legal Security and Public Faith.
- Access: Information on beneficial owners will be available 24/7, 365 days a year, through an electronic model after the applicant’s identity has been authenticated. Access to the CRBO information will be carried out using an electronic model and after the applicant’s identity has been authenticated.
Access to the Register
- Free Access: Authorities competent for money laundering and terrorist financing, notaries, registrars, national, and European authorities, and entities dealing with European funds will have free and unrestricted access to the CRBO information.
- Fees: Other persons or entities that can demonstrate a legitimate interest will be able to access the information upon payment of a fee. This includes persons subject to Law 10/2010 who must request a certification or an extract in order to comply with their obligation under the aforementioned law.
System for Non-Compliance
- Failure to Comply: Failure to comply with the obligation to declare beneficial ownership will result in the closure of the registration sheet, and may give rise to an administrative offence.
- Penalty Regime: The seriousness, possible penalties, and sanctioning procedure for such offence will be determined by the Ministry of Justice.
Interconnection with Other EU Member States
The CRBO will be connected to the Central European Platform, allowing access to information from registers of beneficial ownership in other member states. This interconnection will facilitate cooperation between EU member states in combating financial crimes.
Conclusion
The implementation of the CRBO is a significant step forward in Spain’s commitment to transparency and its fight against money laundering and terrorist financing. The register will provide a comprehensive database of beneficial owners, help prevent the misuse of financial systems, and facilitate cooperation with other EU member states. However, the Spanish government has yet to establish the penalty regime for non-compliance, which remains in the hands of the Ministry of Justice. This lack of clarity may raise concerns about the effectiveness of the system in preventing financial crimes.